Stock Market

January 22, 2014

We heard from several folks that our organization already has a website: but we are not sure what to do next. So here are 5 easy steps to take:

1. Your stakeholders are on a journey-help them: Whether you are a business or a non-profit you have stakeholders. And these stakeholders are on a journey to engage with you. For businesses your stakeholders include (a) customers and prospective customers(b) suppliers and prospective suppliers (c) employees and prospective employees(d) shareholders and prospective shareholders and alumni in each category. If you are a non profit you need to think of donors,volunteeers and beneficiaries. Your website should help them through useful web content.

2.The web content secret- clear,concise and fun: Web content secret is not really a secret but seems rather unclear to most organizations. The secret is really to explain what you do,how you do it and what each stakeholder can expect, in engaging with your organization. Being simple and clear is the goal here. Follow Mark Twain "I never write Metropolis for seven cents because I can get the same price for city. I never write policeman because I can get the same money for cop." Use hyperlinks to keep the text brief like refering to the Mark Twain quote, instead of writing it out entirely.

3.Synchronize web content directly from your organizations actions and plans: There is a crisis when it comes to updating website content. Synchronize or tie content updates to the daily stuff your organization is trying to achieve. Have an initiative? Have a great achievement or success? Stopping an activity for good reason? Putting out an annual report- don't just PDF it - spell it out. Your stakeholders would love to know.Once again do not delete old content unless it is completely dated, for example if you sold a company division two years ago. Remember the holy grail of digital marketing is Search Engine Optimization (SEO) and it depends entirely on your web content.

4.Spend on advertising but only in addition to above. Spending on Google AdWords or other digital advertising and social media will magnify in impact if you have the above pieces in place i.e. your website is trying to help its stakeholders, content is clear, simple,helpful and updated.

5.Measure, Measure, Analyse and Reflect: The impact of your website and digital marketing efforts are easy to track. Even though Google Analytics is free, most websites either don't have it installed or they don't analyze data on a routine basis. Your content drives traffic that is free and is the organic traffic. A simple analysis of visitor behavior gives you clues as to what to do next. For example, people spend a lot of time browsing some products, can you support those products with some digital advertising?

These five steps are easy steps that need to be done on a routine. Reviewing your web site marketing for just two hours a month will have much greater impact than making that one more sales call and, you already know that each sales call takes more than two hours. Contact StratoServe.

October 08, 2013

The US Federal Government is the world's largest B2B buyer and given that (a) not all Federal websites are down and (b) the healthcare.gov (Obamacare) website is having problems suggests that there is a supply chain and specifically a Federal procurement system problem at work.

As the unbelievable drama in Washington DC plays out and the stock market takes a 160 points drop, one wonders : is this really happening? For example, you cannot access the US census data for anything you might be working on. The mystery is that not all websites are down, a phenomenon that Julian Sanchez of the CATO Institute calls "weird" that is not entirely explained by the Washington Monument Syndrome, where the Government of the day just shuts down the visible monuments when faced with prospects of budget cuts.

Consider also that the healthcare.gov (Obamacare) website is unable to cope with the traffic due to the architecture of the software design, done by a contractor. What does the contractor specialize in? Certainly not the web design skills that the folks at Amazon.com have, who will not let you leave the website without buying something with numerous persuasive and relevant offerings.Why did the Federal Government not ask folks at Amazon or one of the large software development firms like IBM to do the Obamacare website? The answer may lie in the Federal procurement system.

Indeed the bigger software folks like IBM might have bidded for the job, but certainly the contractor CGI Group Inc. was better at simply navigating the Federal procurement process. And the Federal Contracting process is so mind-numbing that any business interested in doing work for the Federal Government must first figure out the process that involves thousands of pages and systems that ensure that due process is followed in procurement. This due process keeps Government officials above reproach, and no one expects an Amazon or Facebook experience, anyway. Caught up in the procurement process the Government spends more money on a website, than brain injury research according to the video alongside.

Naturally once a contract is awarded, the Government buying Department and supplier are so exhausted that they don't think of making changes in the contract, and the contractor becomes like a permanent Government employee. The suppliers do not make much margin in Federal contracts , its just that once you are able to get in, its more or less stable and long term work that keeps getting renewed. Competion is sparse because new entrants find the processes and documents to be so onerous, and the margins so modest, that its just not worth the effort of bidding etc.

The website, and probably other supplies get really tested when there are sudden demands like the traffic on the Obamacare website. Other cases like the "weird situation" of some Government websites being up or down during the Government shutdown, could also be due to contractors maintaining the website. There might be different contractual clauses at work and some apathy that does not allow easy access to existing web content like the Census data.

Not allowing access to the existing Federal web content, is a bit like putting drapes on the Statue of Liberty and the Washington Monument because the Government is shutdown. Contact StratoServe.

August 20, 2013

It was just this weekend that a friend was happily recounting how a Best Buy store in Chicago matched the price of an iPad on the Apple website that they found on their smart phone - in the store!. And today's news is all about how Best Buy is turning around under CEO Hubert Joly mentioned in a previous post. While most news reports are highlighting the cost savings by way of closing stores,reducing layers of management, allying with Samsung and Microsoft to operate their own boutiques in Best Buy stores, it appears that Best Buy has re-invented the brick retail model.

Showrooming was really killing Best Buy, where customers would come to the store,touch and feel the product, learn about it and then search online to buy wherever it was the cheapest.Local retailers have been wanting Internet sales tax on online sales to combat "showrooming."

Best Buy has done something ridiculously simple and brilliant : match the price for 19 online retailers and also match lower prices for 15 days after the sale.Here is why the Best Buy strategy points to a re-invention of the Brick retail model:

Value of a customer in the store: The value of a customer who actually enters your brick store is gigantic. For unlike the 2 second bounce from an online store, there is no way that you can leave a Best Buy in under 5 minutes or 300 seconds even if you did not speak to a sales rep. Now consider the great sales support and expertise of the sales people with the assurance that you will not pay more than the online price.

Customer Lifetime Value: If you walked into a Best Buy and the store matched the price on your smart phone - would you buy? It is likely that you'd buy a case for the iPad as well like my friend did. And next time you search on Amazon, you'll think about checking out Best Buy because the risk of higher prices is simply taken away.

Empowered store staff: The ability to match online prices is a huge empowering move for the store staff. Motivation and morale can really zoom when floor sales people know that they can match online prices just as customers search prices on their smart phones in the store.

Store as fulfillment center: Best Buy is trying out 50 pilot stores as fulfillment centers according to ZD Net. While there may be concerns about efficiencies in such small operations, online Best Buy customers will have a reason to visit the brick store... and that comes with the opportunity to check out other offerings.

If the quarterly profit of Best Buy is an indicator, price matching is working and might be the way to go for every business that has a bricks presence. Contact StratoServe.

July 16, 2013

Coca Cola results today pulled down the stock market as overall global sales volumes dipped. Just to cheer up all those Coca Cola loyalists out there, check out the Coca Cola social sharing can video which is truly a brilliant idea.

Social in the real world: The move from physical products to the digital social world is like a one way stampede for most brands. This is probably one of those rare instances that takes a very physical Coke can and converts it into a social sharing item in the real world.

No changes in Supply Chain and distribution : Given that the sharing can is nothing but a 330 ml can split to probably 165 ml cans of the same size the logistical brilliance is amazing. The canning lines should work with minor modifications and the vending machines do not require changes. Also the shrink wrapping lines for can trays for small retail distribution does not require engineering modifications.A quick global roll-out should be possible.

Serving size goes down: Bringing down the serving size to half a can has huge benefits in different global markets. In Asia, affordability is a big reason that pack sizes have been smaller and in the developed markets like the US,there is huge concern with soda and obesity and smaller serving sizes help.

Consumption outside the home: In emerging markets Coca Cola is an outside the home consumption item and Asian cultures are very conscious about reciprocating. So if your friend "shares" a Coke can you sort of feel obligated to reciprocate the next time. Much more than if you got a paper cup from the retailer to split a 330 ml can.Overall unit sales goes up!

Recycling the additional cans is a concern in the comments on the viral video that has already got 1.58 million views. But if you think about it the extra aluminium may be just the lids of the second can which probably can be made thinner since the volume is halved. All in all a brilliant idea from Coca Cola. Contact StratoServe.

March 22, 2013

"Plugging away" or just routinely updating
your organization's web presence with useful content is critical to digital
marketing success. Because once created, digital
content is forever!

It does not matter whether it is
your website that is being constantly updated, or blog posts are coming up, new
YouTube, Instagram, Pinterest, Facebook, LinkedIn or Twitter content is being generated.
Just adding stuff that makes life easier for your customers, suppliers, employees
and all stakeholders and the general public is appreciated and rewarded. That
reward shows in better search engine rankings (SEO), other folks referring to
your site and best of all it gives you that warm feeling of lighting up
the understanding of your field for the world at large.

Considering that in many
organizations only the marketing folks seem to be interested in putting out
content here are some thoughts on how to get more useful content up. And the
lead for this type of work has to come from the marketing department:

To start with identify your outside facing departments
like Customer Service, Supply Chain, Investor relations, Quality and
Safety folks whose work immediately impacts the world outside your firm.
Meet each department head and identify an individual who will be the liaison
for top 3 key issues that are important for that department to communicate
with the outside world. Consider Customer Service:

For example, customer service calls may be related to
some recurring problems that customers seem to face with your product.
Can you create a You Tube help video to help folks along?

Traditionalists might feel really uptight about
confessing that there are some endemic customer service questions that
come up. But guess what.... before
the customer really goes through your annoying IVR phone call system
they would have tried searching online for the problem. Invariably,
there would be good folks who have already posted discussion threads and
Youtube videos to deal with the problem.

It is very likely that you are hearing at customer
service from (a) non Internet users (b) Internet users who are not able
to resolve their issue based on the content available elsewhere to
them. The question to ask is:

Why would you entirely
abdicate solutions relating to your product to the outside world? If
internal folks do the FAQ's for the world ... the chances of
really innovating on the next version/model of your product will
zoom.

Next take up internal facing departments like Production,
Accounting, Finance, HR and try to facilitate stuff that they can share on
the open web. Your HR folks might be quite ready to share a whole
bunch of forms online making life so much easier for employees,
prospective employees and themselves. HR can take one more step of putting
out good advice on their section of their website or on the company
Facebook page.

With good HR content employees will
be happier and a "best place to work" rating can't hurt your
reputation with customers, suppliers or investors. It may not happen
immediately but consistent "plugging away" will ensure that you have
the most relevant and useful industry content whether it relates to customer
service, HR or finance best practices. Since the content is forever.... you can
be sure of rich dividends for your organization. Contact StratoServe.

October 30, 2012

Hurricane Sandy has caused more
destruction than imagined with thousands without power across the region,
flooding of the New York subway, at
least 40 deaths, 3 feet of snow in West Virginia and the NYSE closed for
two days. The NYSE has been closed for two days due to weather for
the first time
since 1888 and the
Great Blizzard of 1888. And you did not have computers and the
Internet in 1888 and also the motor car was yet to be commercialized and weather forecasting was a nascent science.

As Arthur
Levitt former Chairman of the SEC says, this will shake the image of the NYSE. No one is saying that safety of the traders
or exchange employees is not important, but with a back-up plan the seat of
world capitalism should not have to shut down for two days. Obviously the NYSE
did not have confidence in a back-up "mirror" type of arrangement for
electronic trading through the NYSE Acra all electronic platform. As the
video explains it was just that NYSE did not have the stomach to face technical
problems running the exchange electronically during Hurricane Sandy. NYSE folks
continue to be nervous after the Facebook IPO problems and the Knight
Capital Group trading software problems. Perhaps it is timely to do
whatever is necessary to have back-up arrangements so that an institution like
NYSE is not shut down for two days from a predicted weather event. Contact
StratoServe.

August 28, 2012

Product deletion decisions are tough calls to make for CEO's but Lexmark CEO Paul Rooke had to do exactly that with the Lexmark inkjet business. Lexington, Kentucky will lose 550 jobs and global job losses will be 1700 including workers in their Philippines plant. Lexmark will also sell 1000 inkjet related patents.

The Lexmark share price went up by 20% today because investors liked the move by Lexmark to leave a business where 90% of the inkjet market is controlled by HP, Canon and Epson. In addition, store brand inkjet refills and increasingly affordable laser jet printers has squeezed margins and added pressure. The decision by Lexmark to focus on imaging solutions, software was also appreciated and will fit well with user behavior that is increasingly going away from printing as people take to mobile devices like iPads and collaborate through the cloud.

So why are product deletion decisions so difficult? Because calling it "quits" is the most difficult thing to do in new product development and innovation - particularly if the product is already in the market. Sort of like Newton's first law of a body in motion staying in motion. There are workers,managers,suppliers,distributors and the entire supply chain that are in motion and work... only not so profitably because of changed markets,technology or competition.

Once a product deletion decision is made managers tend to go back and try to think of ways to revitalize the product. According to research on product deletion there are three options delete immediately, do a phased deletion by winding down or sell off. Lexmark will probably arrange to continue to supply the ink for its jet printers in the market as the inkjet market continues to rationalize. It's likely that the dominant inkjet players like HP,Canon and Epson will face increasing pressure from store brand ink-jet cartridges like Staples and Costco and we might see further exits in this industry. Contact StratoServe.

July 25, 2012

Simple is always better than complex for innovation adoption but managers are led to believe that complexity is impressive. The bigger corporations hire highly qualified folks with graduate or doctoral degrees. The latter are trained to read, understand and then extend their discipline's knowledge. So you would hope that these folks come up with new ideas. And guess what - they do - but these ideas do not fly as high as they could within and outside their organizations.

The trouble is that very few innovators are able to keep all the complexity in the back end like Steve Jobs of Apple. This despite some recent disappointment with Apple's performance. Steve Jobs figured out that there are very large affluent global market segments who do not want to become techies but yet want to use technology and are willing to pay. For these folks Apple products provide cutting edge technology at the back end and a wonderful user friendly design and great user experience at the front end. Thus, the Apple engineers and designers have all that complexity training from graduate school and are able to pull together the next frontier of knowledge and deploy that knowledge into their products. It's not entirely clear whether the back end of Apple technology is the simplest possible, for example, that they consider putting the least number of soldering or screws to make it easy to manufacture and now repair with their extended warranty programs. We do know that the front customer experience simplicity came from the fanatical insistence of Steve Jobs.

Generally its desirable to keep things as simple as possible. In this context the Mark Twain quote "“I never write Metropolis for seven cents because I can get the same price for city..".. is great advise. For if you stay simple for whatever your work output, it has a better chance of getting understood and enjoyed. Obviously Twain had figured out that using the word "city" in place of "metropolis" would give him more traction with his readers.

So the next time you or your team are making a presentation, putting out an idea or just producing some work output think about making it simple and easy for your customer even when the customer is an internal one. This way, you are likely to get far more traction for your innovation efforts. Contact StratoServe.

July 03, 2012

GlaxoSmithKline is to pay a 3B$ fine, the largest ever for healthcare fraud in the US. In the past, numerous big pharma companies including Abbott, Pfizer have been fined and this is something the industry seems accustomed to. It's important to understand why pharma marketing becomes unethical, if the unethical sales practices are to stop while innovation continues. Here is how the pharma NPD (New Product Development) process plays out:

Drug discovery and patent - no sooner than an invention occurs patent applications are submitted. The patent is good for 20 years when competitors cannot produce the same drug.

Drug development, testing and FDA approval can take upto 10-12 years involving several phases including testing with animals,healthy subjects, patients etc.

Euphoria with FDA approval:The pharmaceutical drug development is so difficult,expensive and uncertain that it is common to find scientists who have worked 20 years and yet not seen a single product make it to market. Naturally when FDA approves a drug there is euphoria amiong shareholders and the stockmarket, expectation and hope among patients and their doctors. But by now only 8-10 years remain on the patent, by which time the pharma company must earn what it can.

Prescription drugs paid by insurance: Once prescribed insurance companies including Government programs like Medicare and Medicaid pay for the medicine. Generally over the counter (OTC) drugs are not covered. Between a generic and a branded, under patent drug- patients,doctors and insurance companies prefer the less expensive generic.

Off Label use- expanding the use of a drug involves using it for applications other than what it is approved for. Think of the many uses of baking soda beyond baking. Not a huge problem in medicine if you think about using a body pain medicine for a headache and doctors do keep trying out drugs for different ailments. But this can be a big problem when a psychiatric drug for adults is used on children without FDA approval as in the GSK case. Apparently the pressure to sell on the sales force is very high.

Beyond off label use there were numerous instances of trying to influence doctors to prescribe particular drugs through inducements such as free holidays,golf, expensive gifts etc. The sales force behavior is consistent with the pressures of pharmaceutical marketing where the pharma sales force is chasing large sales quotas against rapidly expiring patents.

Ideally pharma NPD should involve much more focus at the early stages of the NPD process so that the FDA approvals are quicker and as off label applications become known, the FDA process to include off label use should be made easier. The balance between high speed innovation-----> safety and efficacy by FDA-----> earning money by the company within patent periods is a tough task. Doing so is essential if innovation is to continue for big pharma. Contact StratoServe.

June 21, 2012

The troubles at JC Penney that started with stopping coupons in February sort of reminds one of the New Coke fiasco. In both cases company leaders misjudged what their brand really means to their customer. Here is what happened:

JCPenney marketing folks figured that their customers hated all those coupons and keeping track of the coupons. Counter folks at JCPenney also reported that there were always some customers who missed the date and wanted the discount and appeared displeased if they could not get the discount.

So in February J.C. Penney(JCP) rolled out the program of no coupons and discounts and an "everyday low price." In the Ad alongside the problem is framed as the J.C. Penney marketers saw it. Yes the ladies were annoyed at times with the coupons and missing coupon dates but they loved the process of tracking coupons and grabbing that great deal and actually making a trip to the mall just to use the JCP coupon. If you have observed JCPenney customers before February you would have seen customers that were totally passionate about not missing a coupon deal! The JCP counter staff also had developed their routines of how to deal with customers who had missed coupon dates and also inadertently alarming customers by asking " Do you have a$10 off coupon or a $20 off coupon" which would immediately start a discussion between the shopper and the counter person as to who gets the better coupon with a lot of speculation thrown in. The JCPenney coupons were a real social event much more powerful,engaging and at times frustrating to the customer and retail staff. But all this was the joy of shopping at J.C. Penney..So how did otherwise great marketers make such a huge mistake?

One possibility is that managing the coupons and their redemption was a problem and proving costly. So the marketing camp that misjudged customer and store staff complaints about coupons got some support from the finance folks.

What is perplexing is that consumers who saw the above ad actually have written numerous comments on the YouTube ads clearly stating that they don't like the idea of JCPenney getting rid of coupons. So why did no one in marketing reverse the decision? It's not clear yet. While the President Michael Francis who was the CMO and Merchandising head has resigned,CEO Ron Johnson of Apple store fame, will probably have to make some quick decisions. JCPenney might want to do what New Coke did..... it went back to classic coke. JCPenney customers complain about coupons they miss, but complaining is also a great form of customer engagement.... or so it seems for JCPenney.Contact StratoServe.